PENNSYLVANIA PROPERTY AND CASUALTY
LICENSING 2026 PRACTICE TEST QUESTIONS
AND DETAILED UNDERWRITING CLAIMS AND
RISK MANAGEMENT BREAKDOWN FULL
REVIEW
◉ What must an insurance producer do to apply for a nonresident
license in Pennsylvania? Answer: Prove that their license is in good
standing in their home state
◉ Which best describes the responsibilities an agent owes when
they sell a policy? Answer: To provide the agreed-upon insurance
and to place coverage with a solvent insurer
◉ Which of the following is not a prohibited marketing practice?
Answer: Discrimination among risks
◉ Which law, act, or regulation governs how insurers and their
producers treat personal financial information from individuals?
Answer: Privacy of Consumer Financial Information Regulation
◉ Retention Answer: "do nothing" option; a person becomes
personally responsible for the consequences of risk
,◉ Can an insurer change their assumed name? Answer: Yes, but they
must notify the Commissioner before using the assumed name?
◉ Contract of Adhesion Answer: "take-it-or-leave-it," drafted by one
party; other party has no opportunity to negotiate terms and prices.
Party must "adhere" to provisions as presented
◉ Tad used unauthorized material to assist him on his examination
for his insurance producer license. He justified this by saying the
materials would be available to him in a real life situation. Which
statement is true? Answer: Tad committed a prohibited act.
◉ What is the maximum fine that may be imposed upon a producer
for violating two of the Commissioner's orders? Answer: $20,000; A
fine of up to $10,000 for each violation of an order issued by the
commissioner.
◉ Admitted Insurer Answer: An insurance company authorized and
licensed to transact business in a particular state.
◉ Which of the following is not acting as an insurance producer?
Answer: Brian, who is a VP at AllPro's human resources department
and does not receive commissions
,◉ Edwin has decided not to retain the risk of home ownership
himself. What method of risk does he choose when he purchases
homeowners insurance? Answer: Transfer: the risk of loss is
transferred from the insured to the insurance company in exchange
for a premium payment
◉ Alien Insurer Answer: Incorporated in a country other than the
United States
◉ What fine will the Commissioner impose for the practice of unfair
methods of competition? Answer: Up to $5,000 for each violation
(but not more than $50,000 in a 6 month period)
◉ Which of the following is not an unfair claims settlement practice
if committed by an insurance company in Pennsylvania? Answer:
Failing to promptly settle a claim for which liability is uncertain. (An
insurer is not obligated to settle a claim for which it's not clearly
liable)
◉ Which of the following would NOT be considered
misrepresentation of an insurance policy? Answer: Enthusiastically
promoting an insurance product
◉ Which of the following statements BEST describes the transfer of
risk via an insurance contract? Answer: Not all risks are transferable
via insurance contracts
, ◉ Must the Commissioner conduct an examination of every foreign
or alien insurer licensed in Pennsylvania? Answer: The
Commissioner may choose to waive examinations under certain
circumstances
◉ Aleatory Contract Answer: One party may receive a benefit that is
out of proportion to the consideration he or she paid for.
◉ Bill failed to satisfy the continuing education requirements to
keep his producer's license active in Pennsylvania. Two years later,
he decides to renew his license. Can he do so? Answer: No, he must
apply for a new license.
◉ Which of the following is NOT the action of an agent considering
the best interests of an applicant or insured? Answer: Making a
misrepresentation of the terms of a proposed policy
◉ Who is the head of the Pennsylvania Insurance Department?
Answer: Insurance Commissioner
◉ May a producer charge a service fee for completing a consumer's
insurance application? Answer: No
LICENSING 2026 PRACTICE TEST QUESTIONS
AND DETAILED UNDERWRITING CLAIMS AND
RISK MANAGEMENT BREAKDOWN FULL
REVIEW
◉ What must an insurance producer do to apply for a nonresident
license in Pennsylvania? Answer: Prove that their license is in good
standing in their home state
◉ Which best describes the responsibilities an agent owes when
they sell a policy? Answer: To provide the agreed-upon insurance
and to place coverage with a solvent insurer
◉ Which of the following is not a prohibited marketing practice?
Answer: Discrimination among risks
◉ Which law, act, or regulation governs how insurers and their
producers treat personal financial information from individuals?
Answer: Privacy of Consumer Financial Information Regulation
◉ Retention Answer: "do nothing" option; a person becomes
personally responsible for the consequences of risk
,◉ Can an insurer change their assumed name? Answer: Yes, but they
must notify the Commissioner before using the assumed name?
◉ Contract of Adhesion Answer: "take-it-or-leave-it," drafted by one
party; other party has no opportunity to negotiate terms and prices.
Party must "adhere" to provisions as presented
◉ Tad used unauthorized material to assist him on his examination
for his insurance producer license. He justified this by saying the
materials would be available to him in a real life situation. Which
statement is true? Answer: Tad committed a prohibited act.
◉ What is the maximum fine that may be imposed upon a producer
for violating two of the Commissioner's orders? Answer: $20,000; A
fine of up to $10,000 for each violation of an order issued by the
commissioner.
◉ Admitted Insurer Answer: An insurance company authorized and
licensed to transact business in a particular state.
◉ Which of the following is not acting as an insurance producer?
Answer: Brian, who is a VP at AllPro's human resources department
and does not receive commissions
,◉ Edwin has decided not to retain the risk of home ownership
himself. What method of risk does he choose when he purchases
homeowners insurance? Answer: Transfer: the risk of loss is
transferred from the insured to the insurance company in exchange
for a premium payment
◉ Alien Insurer Answer: Incorporated in a country other than the
United States
◉ What fine will the Commissioner impose for the practice of unfair
methods of competition? Answer: Up to $5,000 for each violation
(but not more than $50,000 in a 6 month period)
◉ Which of the following is not an unfair claims settlement practice
if committed by an insurance company in Pennsylvania? Answer:
Failing to promptly settle a claim for which liability is uncertain. (An
insurer is not obligated to settle a claim for which it's not clearly
liable)
◉ Which of the following would NOT be considered
misrepresentation of an insurance policy? Answer: Enthusiastically
promoting an insurance product
◉ Which of the following statements BEST describes the transfer of
risk via an insurance contract? Answer: Not all risks are transferable
via insurance contracts
, ◉ Must the Commissioner conduct an examination of every foreign
or alien insurer licensed in Pennsylvania? Answer: The
Commissioner may choose to waive examinations under certain
circumstances
◉ Aleatory Contract Answer: One party may receive a benefit that is
out of proportion to the consideration he or she paid for.
◉ Bill failed to satisfy the continuing education requirements to
keep his producer's license active in Pennsylvania. Two years later,
he decides to renew his license. Can he do so? Answer: No, he must
apply for a new license.
◉ Which of the following is NOT the action of an agent considering
the best interests of an applicant or insured? Answer: Making a
misrepresentation of the terms of a proposed policy
◉ Who is the head of the Pennsylvania Insurance Department?
Answer: Insurance Commissioner
◉ May a producer charge a service fee for completing a consumer's
insurance application? Answer: No
